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From here, a daily close above the 0.65 figure would suggest that near-term selling pressure has been neutralized. That might open the door for another challenge of support-turned-resistance in the 0.6671-90 zone, a former range floor in play since August 2019.

If prices are rejected downward, initial support appears to be marked by the 61.8% Fibonacci retracement at 0.6236. Breaching this barrier – with confirmation on a daily closing basis – would also mark the break of counter-trend support and set the stage for the still-dominant bearish bias to be reasserted.

Zooming into the four-hour chart cautiously argues in favor of the latter scenario. The appearance of negative RSI divergence speaks to ebbing upside momentum may speak to a bearish reversal in the cards. Confirmation on a break of rising trend support seems needed for an actionable setup however.

AUD/USD TRADER SENTIMENT

Retail sentiment data shows 51.16% of traders are net-short, with the short-to-long ratio at 1.05 to 1. IG Client Sentiment (IGCS) is typically used as a contrarian indicator, so traders being narrowly net-short suggests a cautiously bullish AUD/USD trend bias.

However, the net-short skew in traders’ positioning has narrowed over the past day. With overall exposure already almost in balance, this may be paving the way for a net exposure flip that puts traders net-long. That might accompany a reversal downward.

Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk. Losses can exceed deposits. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.

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